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September 18, 2008

EU, RUSSIA WOO NIGERIA OVER TRANS-SAHARAN GAS PIPELINE PROJECT

Indications emerged on Wednesday that the European Union and China were currently wooing the Federal Government over the construction of the proposed N2.4tn ($21bn) Trans-Saharan Gas Pipeline project. The project, which stretches from over a distance of 4,300 kilometres across the Saharan desert, is to be shared among Nigeria (1,050km); Niger (750km), and Algeria (2,500km). Upon completion, the project would connect Nigeria’s gas reserves, estimated as the world’s seventh largest, to Europe through Algeria’s Mediterranean coast. A source in the Presidency disclosed that the EU and Russia were making spirited efforts to get the nod of the Nigerian authorities for the execution of the project. The source noted that the renewed interest from the two power blocks followed deliberate efforts by President Umaru Yar’Adua to execute the age-long proposal. The source also said the EU, which had previously displayed a cold shoulder towards the project, renewed its interest following fears that Gazprom, the Russian gas monopoly, was planning to gain access to Nigeria ?s vast gas reserves. Gazprom had offered to back the planned 4,300km Trans-Saharan Gas Pipeline. The EU feared that by gaining control of Nigeria’s gas reserves, Gazprom could effectively succeed with its deliberate plan to further tighten its grip on energy supplies to Europe. According to the source, the EU’s fears heightened when Gazprom signed a Memorandum of Understanding with the Nigerian National Petroleum Corporation in Moscow to cooperate on gas exploration, production and transportation. The source added that, as a result, the EU had offered Nigeria financial and political backing for the project. The EU intends to use the Trans-Saharan Gas Pipeline to pump its gas supplies from Africa directly to Europe. According to a recent report by The Financial Times magazine, the EU’s renewed interest may not be unconnected with its rising desperation to reduce its dependence on Russian for gas supplies following the conflict in Georgia. Punch